ExchangeWire

ExchangeWire

January 22, 2016

By Sonja Kroll

While budgets and ad spend increase, and programmatic seems ever-on-the-rise, viewability figures appear to be headed south. From the complex web of causes for the contradiction of rising ad spend and declining viewability, Ben Pheloung, head of demand, EU, PulsePoint, (pictured below) identifies ad blocking, ad fraud, and the rise of mobile as the three challenges which need to be addressed.

Across the world of brand marketing, we’ve heard the mantra ‘content is king’ for many years now. With the growth of social media fuelling a reinvention in brands’ creation of rich and engaging content to communicate with their target audiences, the importance of rich content has quickly spread to the broader digital media environment. Publishers are rushing to offer new content creation services aligned with their editorial teams.

As the digital arena has made it far easier for a wider range of content providers to compete for attention, creativity has been the most powerful tool for getting audiences to pay attention. Yet programmatic advertising has prided itself on moving away from creativity and relied almost exclusively on hard data; everyone has been told ‘Math Men, not Mad Men’. Indeed, given that creativity has been the fundamental bedrock of the advertising industry, it is fair to say that the industry is currently facing a creativity crisis – at least as far as the programmatic environment is concerned.

The first half of last year saw a rise in buy-side programmatic ad spend, yet only 55% of these ads were seen by web users, with viewability rates down 0.7%, compared to 12 months earlier. This is on top of overall engagement rates falling by 33%. This decline has a different cause depending on who you ask; the growth of technology and automated processes, over-saturation of digital ads, and too great an emphasis on cost-saving over quality are but a few of the possible causes. It is a complex problem. Three challenges stand out as particular creative concerns for the programmatic industry, all of which are currently resulting in a low-quality and intrusive user experience.

1) Ad blocking: It’s estimated that the global economic cost of blocking ads will reach USD$41.4bn in 2016. Intrusive, boring, and unavoidable advertising is driving users to block ads. Every single person that has sat through an unskippable YouTube ad has thought about downloading an ad blocker. It’s that simple. In the past, the worst thing that happened when someone was annoyed by your campaign was they didn’t convert and you wasted an impression. Now, that user can actively remove themselves from the ecosystem for good.

The current debate within the publishing world is whether to force users to choose between paying a microcharge for ad-free content, or accessing the content without ad blocking software. But there is a risk that this overshadows the question of where the advertising industry – particularly programmatic – is going wrong. The continued growth in the popularity of branded social media content has demonstrated that consumers don’t necessarily care whether content is sponsored or not. They just want it to be relevant and engaging. Create better advertising, and fewer users will hit the button on the ejector seat. The key to getting this balance right is using a content marketing platform capable of listening to consumers and adjusting the content it presents to them, combining performance metrics with genuine consumer insight as to how the content is performing.

2) Ad fraud: USD$1 out of every USD$3 is lost to ad fraud, demonstrating just how endemic the problem has become within the global industry. Ironically, fraudsters have shown themselves to be endlessly creative in their bid to divert programmatic ad spend. The industry needs to demonstrate the same level of innovation in its response, to prevent advertisers from wasting spend, but also to ensure that a) users are seeing the ads in the first place, and b) the right ads are actually targeting the right users in the right way. AppNexus has been very vocal about how they have cleaned up their exchange. We’ve done the same at PulsePoint by combining innovative proprietary human and machine verification filters to ensure inventory and audience quality. More of the industry needs to follow suit.

3) The rise of mobile: In 2015, 50% of digital ad spend was on mobile, and 78% of Facebook ad revenue was from mobile. Google and Facebook accounted for 50% of mobile ad spend in 2015. Despite this, we’ve yet to see a true silver bullet in terms of how to monetise mobile. While it’s not the only answer, a good place to start is to inject more creativity into mobile advertising – jamming a traditional display ad into a mobile format isn’t going to cut it. We need advertising that effectively engages audiences with brands, irrespective of channel; and this means advertising must be carefully tailored, based on the usage/browsing habits of the target audience in each instance. For example, in-app monetisation has the potential to shift the dynamics of the UK programmatic marketplace in the year ahead. But success within the in-app space, again, requires advertisers to develop more creative content, tailored appropriately for the channel in question, and served-up based on granular data insights – for example, what is the appropriate frequency and quantity of advertising appropriate for a particular app and audience group?

With 40% of audiences removing themselves from the market, 33% of media spend equating to fraud, and 70% of audiences living on mobile, it’s certainly time to pay a bit more attention to how we can not only reach, but excite and engage with users on a consistent and targeted basis. This requires a combination of creativity and technical know-how: understanding audience data, ensuring exchanges are clean and closely monitored, and finding more effective means of delivering programmatic content that is genuinely tailored for each channel – for example, what content users respond to on which platform, how long they interact with it, and whether or not it is shared. It goes without saying that creativity has always been the key to increasing brand engagement, and as we move into 2016, this has to be our top priority across the industry as a whole.